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MENAFN - AFP - 07/12/2012

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(MENAFN - AFP) Leading British shoemaker Pavers, one of the first retailers to be allowed to operate in India under new 100 percent foreign ownership rules, has called the nation's infamous red tape a "nightmare".

"Regulations are a nightmare for every retailer whether from outside India or the domestic retailer," Stuart Pavers, president of the family-owned firm, told India's Mint newspaper in an interview published on Friday.

Pavers' critical assessment of the challenging business conditions follow India's recent introduction of a string of reforms to open the economy wider to vital foreign investment and entice overseas businesses to set up shop.

In Britain the firm can deliver fresh stock nightly to each store, said the Pavers chief, but in India "it takes five to 10 days to deliver from the warehouse to the store" due to taxation and suffocating paperwork.

Moving stock from one city to another in Britain takes two to three days but in India shipments take up to two weeks and involve "20 pieces of paper and three different taxes to be paid", he said.

India has long been criticised as one Asia's most inefficient bureaucracies, with its byzantine regulations and widespread corruption seen as a major deterrent to foreign investment.

"What we are looking for in future is a lot of deregulation to make it easy to transport the goods from one place -- reduce the taxation and paperwork," Pavers said, complaining, for instance, that labelling rules "keep changing".

Pavers, which in October won formal approval from the Foreign Investment Promotion Board to run 100-percent owned stores, has been in India for five years through franchises and partners and has 142 shops.

The clearance came after India allowed at the start of 2012 retail operations selling one brand, such as Pavers, to be 100 percent foreign-owned rather than having to operate with a local partner as part of its reforms.

In another move, the government has allowed foreign supermarket chains such as Walmart to set up shop, causing huge political controversy amid claims the big retailers will swamp India's small family-run stores.


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